Trump Keeps Zimbabwe’s Biggest Bank Guessing

HARARE – CBZ Holdings Limited, Zimbabwe’s biggest banking group with a $2,4 billion asset base, is anxiously awaiting the conclusion of an extensive American investigation into sanctions busting transactions transmitted for a client that was under the US sanctions list a few years ago.

The
diversified financial services group said on Monday its flagship banking unity,
CBZ Bank would be complying with Office of Foreign Assets Control (OFAC)
investigators, as they dig deeper into its accounts to determine the extent of the
breaches.

However,
the Zimbabwe Stock Exchange listed group knows that a decision against it will hit
its pockets hard, especially after President Donald Trump’s administration recently
slapped Standard Chartered Bank Plc (Stanchart) with a US$18 million fine for
similar transactions made by its Zimbabwean unity.

Stanchart has accepted
the outcome, which relates to dealings with parties on the US sanctions list
under the Zimbabwe Democracy and Economic Recovery Act.

On
Monday, CBZ Holdings said it had treated the matter as a contingent in its
financial results for the year ended December 31, 2018.

Finance
director, Colin Chimutsa told an analyst briefing that coming up with an
estimate of the quantum of the fine would be difficult until a determination was
made.

However,
the fine extended to Stanchart could give CBZ an indication of the bill that will
confront it if it is found guilty.

“CBZ
Bank Limited is cooperating in the ongoing investigations by the Office of
Foreign Assets Control regarding historical transactions involving a party that
was subject to OFAC economic sanctions,” the group said in a note relating to
the issue.

“Based
on the facts currently known, it is not practicable at this time for CBZ Bank
Limited to determine the terms on which the ongoing investigations will be
resolved, or the timing of such resolution, or for CBZ Bank Limited to estimate
reliably, the amounts or range of possible amounts of any fines and/or
penalties, which could be imposed,” it noted.

OFAC
administers and enforces economic and trade sanctions based on US foreign
policy and national security goals against targeted foreign countries, regimes,
terrorists, international narcotics traffickers, those engaged in activities
related to the proliferation of weapons mass destruction and other threats,
according to a statement of the International Monetary Fund website.

Relating
to the Stanchart case, OFAC said in February; “Separately, between May 2009 and July 2013, SCB (Standard Chartered
Bank) Zimbabwe processed transactions to or through the United States involving
Zimbabwe-related Specially Designated Nationals (SDNs) or entities owned 50
percent or more, individually or in the aggregate, by one or more
Zimbabwe-related SDNs. These transactions constituted apparent violations of
the Zimbabwe Sanctions Regulations (ZSR), 31 C.F.R. Part 541. SCB will remit
$18,016,283 to OFAC to settle civil liability relating to the apparent
violations of the ZSR”.

Under the sanctions that
have been blamed by Zimbabwean President, Emmerson Mnangagwa for destroying the
economy, the US restricts the movement of money owned by Zimbabwean state firms
and individuals on its sanctions list.